With the increasing advancements in technology and business markets, the transportation of goods by utilizing the ocean has become more popular over recent years. Ocean transportation has been proven to be an economical, efficient, and environmentally-friendly way to transport goods between countries and continents. It also offers a more convenient method of transportation for moving oversized cargo across the seas.
But all of these benefits only come when the right knowledge, experience, and planning is conducted. Without the proper resources, ocean transportation businesses can easily go under. That being said, here are some ways that you can ensure profitability in sea freight shipment specifically. Whether you’re transporting earthly materials or other bulk cargo, these tips can increase your overall profitability.
Carefully Consider Who You Employ
In order for any business to become successful, you need to make sure that you have the right kind of people working within that business. For sea freight specifically, you’ll need to hire workers that have previous experience in the business or that are easily adaptable to the particular business of ocean transportation.
You need the right kind of workers conducting work regarding their particular strengths, and you’ll need to offer sufficient training for every one of your workers before placing your business in their hands. Every worker needs to understand the sea freight business and how to best increase profits overall. The best companies offering sea freight services have the most experienced and motivated employees and staff.
Reduce Your Costs
Ultimately the best way for you to increase your profits is to reduce the costs needed for operation. You can best reduce your costs by analyzing your business and optimizing the workforce. This also ties into making sure you have a reliable and experienced workforce, since the better that they perform, the more profit that your business will ultimately have.
You’ll need to understand your particular business overall to ensure that you reduce your costs because if you reduce costs in a certain area, then this could have negative implications and could potentially cause your business to go under. Understanding your business also requires that the captains and leaders have a wide range of experience and full knowledge of each shipment in particular.
To decrease the amount of money your business is spending on costs, you’ll need to have a full layout of all the areas you’re putting money into. For instance, layout the money that you’re spending on labor in the workforce, storage, inventory carrying, and some other logistics. After you have a better understanding of your costs, you can create a plan to help reduce them.
Consider the Service Type That You’re Using
There are many different service types available for companies to choose between, ranging from FCL, LCL, and GROUPAGE. The service type ultimately determines how much money you’re spending on each load and how profitable each load can be.
FCL refers to a Full Container Load, which is when you’re ultimately using one full container to ship to one customer. Depending on what you’re shipping and what this customer is paying, this has the potential to be the most profitable or the least profitable method of service.
LCL refers to Less than Container Load, which means that there are multiple different customers that you’re shipping to on one load. And GROUPAGE means that a Groupage operator owns the cargo that you’re shipping to various different customers.
Have Adequate Insurance
Lastly, you’ll want to make sure that you have a viable type of insurance coverage for your sea freight operation. Paying for insurance does increase the numbers that you spend on costs for your company, but it can increase your profits and save you money in the long-run. Practically anything can go wrong while you’re shipping cargo across seas, so it’s important that you cover yourself just in case something happens. Whether that’s a single freight falling overboard or the whole ship malfunctioning, having adequate insurance can help protect you when needed (1).
Overall, running a sea freight business is complex and difficult if you’re not prepared for it. But with the right knowledge, experience, and resources, you and your workforce can increase the business’ profits and make more money in the long-run.